Paramount Skydance said Friday that it agreed to pause its merger with Warner Bros. Discovery until next June at the latest while a judge considers a lawsuit from state attorneys general who sued to block the $110 billion deal.
The delay is the latest twist in the mega deal, which could reshape Hollywood by merging Paramount Pictures and Warner Bros. Studios.
In a legal filing, Paramount and a group of state attorneys general – who had sued the media giant over antitrust concerns – said they had reached an agreement to freeze the merger while the case winds its way through the courts, extending a shorter pause imposed this week by a federal judge in California.
The merger deal expires on June 4, 2027 if the deal hasn’t closed by that date.
“Today’s agreement is a significant win because the result is exactly what we have sought from the outset: a direct path to a trial based on the evidence,” said a Paramount spokesperson.
“This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached. Plaintiffs’ market definitions bear no relationship to the realities of today’s marketplace and cannot withstand scrutiny. We look forward to proving our case at trial.”
The deal would not only unite movie studios Paramount and Warner Bros, but also bring together streaming services Paramount+ and HBO Max, as well as networks CBS and CNN.
The standstill could be expensive for Paramount. The David Ellison-led company agreed to pay Warner Bros. Discovery shareholders a fee of $650 million every quarter the deal doesn’t close beginning in October.
The group of 12 states led by California, include New York, Connecticut, Oregon and Arizona. In a statement, New York Attorney General Letitia James called the halt a “crucial victory.”
“From the workers and artists who bring stories to life to the families who buy tickets at the box office, Paramount’s illegal takeover of Warner Bros. is a bad deal for all those who count on a competitive entertainment industry,” James said.
Shares of Paramount Skydance fell just over 3% on Friday. Shares of Warner Bros. Discovery slid just under 1%.